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Federal Transit Administration : DBE Program Basics

Federal Transit Administration : DBE Program Basics. FTA Civil Rights Training. Basic Terms. DBE Small business (as defined by SBA) owned and controlled by a socially and economically disadvantaged individual UCP State-level entity responsible for certifying eligible firms as DBEs.

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Federal Transit Administration : DBE Program Basics

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  1. Federal Transit Administration: DBE Program Basics FTA Civil Rights Training

  2. Basic Terms • DBE • Small business (as defined by SBA) owned and controlled by a socially and economically disadvantaged individual • UCP • State-level entity responsible for certifying eligible firms as DBEs

  3. Basic Terms (Cont’d) • Race conscious • A measure or program that is focused specifically on assisting only DBEs • Includes DBEs owned by women • Contract goals • Race Neutral • A measure or program that is, or can be, used to assist all small businesses

  4. RC v RN: What fields to Use? Race Conscious Race Neutral • Set contract goals… • When projecting goal miss • (4) “must provide for participation by all certified DBEs” • not “divided into group-specific” • Did not set contract goals • Attributed to all the other wonderful things you do • Bottom line: Open Bid

  5. DBE Program: 4 Key Elements

  6. DBE Program Document Who must have a DBE program? FTA recipients receiving planning, capital, or operating assistance who will award prime contracts exceeding $250,000 in FTA funds in a Federal fiscal year −49 C.F.R. Part 26.21(a)(2)

  7. Key Elements of a DBE Program Document • Policy Statement • Standard Contract Assurances • DBE Liaison Officer • Prompt Payment/RetainageProvision(s) • Good Faith Efforts Criteria • Monitoring Mechanisms • Small Business Provision • Overconcentration • Goal Setting Methodology

  8. Policy Statement • General statement, signed by your organization’s CEO/highest officer, confirming commitment to the DBE program • Use the language from your financial assistance agreement! • Also appears in 49 C.F.R. Part 26.13(a)

  9. Contract Assurance • Non-discrimination clause • Must be in every contract you sign with a prime contractor, and every contract your prime contractors sign with subcontractors • Use exact language from 49 C.F.R. Part 26.13(b)

  10. DBE Liaison Officer (DBELO) • Individual within your organization primarily responsible for properly implementing the DBE program • Must have: • Direct, independent access to CEO • Adequate staff and resources to administer the program in compliance with the DBE rule

  11. Prompt Payment/Retainage • Must have clause in prime contracts requiring the prime to pay subcontractors for satisfactorily completed work no later than 30 days from receipt of payment from the recipient • Must have a mechanism to monitor/ensure prompt payment occurs

  12. Good Faith Efforts Criteria • Must have process/criteria in place for evaluating bids on solicitations with DBE contract goals • If don’t meet stated goal, did bidder make and document “good faith efforts” to meet the goal? • See Appendix A for guidance, additional information

  13. Monitoring Mechanisms • In the past, the DBE rule required that recipients monitor contracts/projects with DBE participation, but without specifying what must be done • Now, must perform site visits and certify to FTA (or FHWA, FAA) that the DBEs are performing the workassigned to them

  14. Monitoring and Oversight • Historically under-enforced area of the DBE program • Why important? • Root out fraud—no DBE “fronts”! • Ensure DBEs are getting the opportunity to perform work committed to them

  15. New Monitoring Requirements – 26.37 • New Rule! • Recipients must monitor and provide written certification for every contract/project in your state on which DBEs are participating, ensuring the DBE(s) are in fact performing the work for this purpose

  16. Monitoring: Removal of DBE Firms • New Rule! • Prime contractors may not terminate DBE subcontractors from projects without “good cause” and approval from the project sponsor/recipient

  17. Overconcentration – Hot Topic • If you determine DBEs are sooverconcentrated • …unduly burden non-DBE firms • Devise appropriate measures

  18. Small Business Provision - New Rule! • Recipients must add an element to their DBE programs which fosters small business participation • Must submit plan to relevant operating administration by February 28, 2012 • More about this elsewhere!

  19. Accountability and Goal Submissions – 26.47 • New Rule! • If a recipient fails to meet its overall DBE goal, • it must analyze the shortfall, develop corrective actions and • submit the plan to the relevant operating administration for approval Hot Topic!

  20. Federal Transit Administration: DBE Goal Methodology The USDOT Method

  21. Goal Setting Methodology What must I submit? • Letter to FTA stating your overall goal, including the race conscious/race neutral split • A copy of the published notice • A copy of the methodology and any worksheets used to calculate the goal

  22. What is a DBE goal? Key Points • Should be based on demonstrable evidence of ready, able and willing DBE firms relative to all firms available to perform on your contracts • Your overall DBE goal should reflect what you’d expect DBE participation to be absent the effects of discrimination

  23. Step 1: Base Figure All Firms Formula DBEs ÷ All Firms = Relative Availability

  24. Step 1 Considerations Do: • Use all current, available data • Accurately account for all contracting opportunities • Use weighting whenever possible

  25. Step 1 Considerations Don’t: • Use past participation as your base figure • Utilize local preference • Exclude some contracts/contracting opportunities because you don’t think there will be DBE participation

  26. Where do I find DBEs? State UCP Directory Provides “one stop shopping” for recipients, prime contractors, DBEs, and the general public

  27. UCP Directory Sample Page

  28. Step 1 Example • NAICS 423120 • 2 DBEs in La. • Using census data, state business directory, and prior bidders lists, you’ve identified 18 non-DBEs in La. under NAICS 423120

  29. Step 1 Example Formula Calculation Base Figure = DBEs ÷ All Firms Remember, All Firms = DBEs + non-DBEs 2 DBEs ÷ (2 DBEs + 18 non-DBEs) = 10%

  30. Weighting • The process by which you consider DBE availability relative to your anticipated available contracting opportunities • May weight goals on either a project-by-project basis, or based on individual contracting opportunities derived from a single project

  31. Weighting Formula Weighted Base Figure = (Projects % of total budget) x (Relative Availability)

  32. Weighting Example • In addition to your contract for vehicle parts, you are also letting a contract for electrical services • Parts = 75% of total budget • Electric = 25% of total budget • Searching the La. UCP directory, you find 26 firms under NAICS 238210 (Electrical Contractors) • Using census data, state business directory, and prior bidders lists, you’ve identified 374 non-DBEs in La. under NAICS 238210

  33. Weighting Example Contract # 1 Contract # 2 2 DBEs ÷ (2 DBEs + 18 non-DBEs) = 10% 26 DBEs ÷ (26 DBEs + 374 non-DBEs) = 6.5%

  34. Weighting Example Un-weighted Weighted (2 + 26 DBEs) ÷ (28 DBEs + 392 non-DBEs) = 6.6% .75 x (2 DBEs ÷ 20 All Firms) + .25 x (26 DBEs ÷ 400 All Firms) = 9.2%

  35. Step 2: Adjust Your Base Figure Evidence to Consider • Current capacity of DBEs to perform work • Disparity studies • Input from interested parties • Local chambers of commerce • NAACP • Minority business associations • Contracting associations

  36. Step 2: Past Participation • May use past participation as Step 2 adjustment if contracting opportunities are the same/similar to those in prior years • If use, determine median past participation, then average with base figure determined in Step 1

  37. Past Participation Formula Adjusted DBE Goal = (Step 1 Base Figure + Historic Median) ÷ 2

  38. Past Participation Example Data • Base Figure: 15% • Participation: • FFY2008: 7% • FFY2009: 22% • FFY2010: 11% Calculation 15% + 11% = 26% 26% ÷ 2 = 13% Adjusted Goal: 13%

  39. Race Conscious-Race Neutral Split Using past DBE achievement, determine what amount of overall goal will be met via race neutral means

  40. RC/RN Formula Race Neutral Projection = Adjusted Base Figure x (Past RN Achievement ÷ Past Total Achievement)

  41. RC/RN Split Example • Using prior example, we know the adjusted goal is 13% • Using FFY2010 DBE reporting data, you also know the following: • FFY10 Goal: 10% • Achievement: 12% • Race Conscious: 5% • Race Neutral: 7%

  42. RC/RN Split Example Calculation Final Result 13% x (7 ÷ 12) = 7.6% • Goal: • 13% • Race Neutral • 7.6% • Race Conscious • 5.4%

  43. Question Time!

  44. Find Help! • On the web: • Federal Transit Administration’s DBE Page • www.fta.dot.gov/dbe • Office of Small & Disadvantaged Business Utilization • www.osdbu.dot.gov • TEAM Help Desk • 888-443-5305 • Team.HelpDesk@DOT.GOV • Call your Regional Civil Rights Officer!

  45. Need more information/assistance? Contact: Federal Transit Administration Office of Civil Rights 1200 New Jersey Ave. SE East Building, 5th Floor Washington, D.C. 20590 Office: (202) 366-4018

  46. Thoughts? Questions? Comments?

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